News Briefs

8/21/2013, Elul 15, 5773

MK Blasts Mortgage Cuts as Harmful to Average Israelis

The Bank of Israel sees its new mortgage restrictions as preventing the inability to repay loans. But Member of Knesset Isaac Herzog (Labor) blasted the proposal in a statement on Wednesday. "It will be difficult for tens of thousands of young couples obtain an apartment and Israel," he stated. MK Herzog, a former Housing Minister, warned the new rules could make it so only the wealthy would be able to apply for a mortgage. He also called for more houses and apartments to be built.

The Bank of Israel issued more restriction of mortgages on Wednesday. If the monthly payment is more then half of ones salary, then one may not obtain a mortgage or a house or apartment. Other restrictions were imposed as well such as a ban on mortgages over a 30 year period. In a statement, the Bank of Israel said, "The objective of the guidelines is to reduce risk, particularly the interest rate risk, for the public, which is taking mortgages on terms that are liable to jeopardize the future ability to repay the mortgage, resulting in potential risk to the banking system from these loans."